BRANCACCIO: Do you have any idea how Americans work today? More of it than you think involves temping and independent contractor work. They can let you go tomorrow and in these jobs, benefits are rare. Our story is about one group's way to get health care coverage to some of the tens of millions of Americans who are fully employed but not in regular staff jobs. We'll look into what this says about health care and the workplace of the future.

Jennie Amias produced our latest report on social entrepreneurs at work, a series we call, "Enterprising Ideas".

BRANCACCIO: It's another Monday morning for Amy Peters, 21st century worker. And every weekday, Amy leaves her home in New York's Staten Island for the eight o'clock ferry across the harbor and into to the heart of Manhattan. To her job at a one of those glittering financial institutions that dominate the city.

PETERS: I sit at my cube. Log into my work email, check it, check phone calls, voicemail at my desk and will do what I need to do for them. Take a lunch break, leave at 5:00, do it again the next day.

BRANCACCIO: Do you have a rough estimate of maybe how many hours you put in in a week?

PETERS: Yeah I would say about 40.

BRANCACCIO: 40?

PETERS: Mm hmm.

BRANCACCIO: Sounds like a regular job.

PETERS: Yes. It is, it's pretty much Monday through Friday, 9-5

BRANCACCIO: The thing is, Amy Peters is afraid to tell us where she works, because she's afraid of being fired. She may be working just as long and as hard as the guy down the hall, but she's not a staff employee. Amy is a freelancer.

BRANCACCIO: Do you get any vacation?

PETERS: Yes actually. I get two weeks

BRANCACCIO: So that comes with it, with two weeks that you can take off at some point in the year?

PETERS: And three sick days.

BRANCACCIO: Three sick days. Three whole sick days.

AMY PETERS: I guess I try to have a positive outlook. But it's tough on people to pay for dental, to pay for healthcare on top of everything else.

BRANCACCIO: And there's a little clinic inside the building too?

PETERS: Mm hmm.

BRANCACCIO: Can you use that?

PETERS: Um...I don't think so. I don't think I could sign up for a flu shot. Maybe if I was...they would take out the defibrillator if I needed...If I was having a heart attack or something, but for the most part no.

BRANCACCIO: Ok, no flu shots. But it's not getting health care coverage like the real employees that really rankles freelancers like Amy.

That's got to be a little bit tough for you knowing that you're in the same building with people who are getting a better deal on their healthcare coverage

PETERS: it's definitely bad for morale in general because I'm not the only person doing this. Like, they need us there every day. There are dozen upon dozens of us doing this kind of work every day and there are some people who have been there 10, 15, pushing 20 years doing what I've done with mouths to feed and mortgages and things like that.

BRANCACCIO: And they're not real employees?

PETERS: Mm mmm.

BRANCACCIO: For decades.

PETERS: Mm hmm. One guy again pushing probably been there probably for almost 20 years.

BRANCACCIO: And do you get the sense from the guy that you're thinking of that he has that work arrangement because he likes the flexibility or he would like to be a full employee?

PETERS: I'm under the impression that benefits would definitely be nice. It's not necessarily negative like: "I hate these guys, I want benefits." But it's like it would be such a nice relief for them to just get covered for being there every day.

BRANCACCIO: So you work with a guy who has been in this not a real job status since like the Ronald Reagan administration.

PETERS: Yes.

BRANCACCIO: Do you think that's right?

PETERS: I don't...well it's...I don't think that it's right. I think that there are...I...I understand the bottom line. The one thing about working, doing what I do is I've kind of gotten to understand like how the world works so do I think it's right that the company needs to save money? I mean yeah sure, they have that right. But it's too bad that it has to come down to giving people benefits or paying them through a different system.

BRANCACCIO: Amy emphasizes that she likes her supervisors and she's actually into her job: she produces and edits in-house videos for her firm, which fits with her after-hours work as a documentary filmmaker.

She is just one of about 42 million workers in the United States—roughly a third of the workforce—who are now doing their jobs without the traditional safety nets that built the middle class. Many are temporary workers...call them what you will, casuals, independent contractors. It's a way a life that's gone way beyond secretarial temps. Non-staff workers are especially common in the media, internet and other "knowledge economy" jobs that power American commerce.

It's a work arrangement that offers nice flexibility for some...but for many, independent work can mean insecurity.

AMY PETERS: It's definitely uh...difficult day to day and I know people who spend half their time working on the phone getting their next job. So it's very, very, very hard to be a freelancer. And some people might like it cause it feels like oh, you get to work from home or whatever, but it's always so uncertain.

BRANCACCIO: Richard Buxenbaum knows the feeling. This coffee shop in Greenwich Village doubles as one of his offices. Over his 20-year career, he's worked for all the major television networks...opening animations for shows, like this one for Conan O'Brien...are his specialty.

He jokes that he's been freelance since birth.

BUXENBAUM: I have my own company but Ill also just will as a freelance as a director for hire, as a cinematographer for hire, as a designer for hire, as a creative for hire.

BRANCACCIO: And as a freelancer, when it comes to medical costs, Buxenbaum works without a net.

BUXENBAUM: A few years ago I just dropped off, dropped all my insurance, which I never used also. It's probably pretty stupid, but it's reality.

BRANCACCIO: His less-than-perfect solution: a plane ticket to Costa Rica where he gets a full medical check up and teeth cleaned on the cheap.

The Costa Rican solution, however, may not be practical for the great masses of freelancers. Amy Peters is trying something else.

PETERS: I uh...signed up for the Freelancer's Union and it was with my dental it's $270-something dollars

BRANCACCIO: That's per month, through the Freelancers' Union. It's the brainchild of a child of the labor movement, Sara Horowitz. It aims to help the freelance work force get what it needs.

HOROWITZ: Economic development in America is being driven by this new workforce. The new jobs that are being created are by workers just like this. And what's exciting is, they're entrepreneurial, hard-working, they have a passion for what they do. This is exactly the kind of worker we should be supporting. We shouldn't be creating such a hostile environment for this kind of work.

BRANCACCIO: Horowitz is not fighting the decline of traditional staff employment. She wants to recognize this as a fact of life and work to build a social safety net for this growing workforce to make this kind of labor bearable, even possibly uplifting.

HOROWITZ: Investors are really on a shorter-term timeline. Not just in America, but all over the world. And that shorter-term timeline is pushing workers into these jobs that are lasting for shorter periods of time. And up until now, we haven't had a way to address that imbalance. Business needs the short-term type of work. We understand that. Check. But workers can't just be pulled through that system without having an ability to say what they need. And that's our job in the labor movement.

BRANCACCIO: The needs are great, as Horowitz learned the hard way. Even though she had gone to law school, she herself soon ran into an employer leery of commitment.

HOROWITZ: I—actually started out—working in a law firm and was—all the people who were hired after a certain day were made independent contractors. And—kind of as a joke, the lawyers—we called ourselves the Transient Workers Union. And so the seed was planted.

BRANCACCIO: But it's the mark of an entrepreneur or social entrepreneur to spot a need and get to thinking bigger about the challenge.

HOROWITZ: Part of it was personally being termed an independent contractor and not being provided benefits. But it was not just a "woe is me," it was the realization that this was the beginning of something completely different. And I've worked for union since I'm 18. My grandfather was the vice-president of the Ladies Garment Worker's Union. My father was a labor lawyer. I used to think the only two jobs you could have was to either be a worker or a union organizer.

And so, suddenly I thought, "What is the future of unionism going to be?"

BRANCACCIO: Horowitz drew from two attributes of existing unions to answer that question as she began to formulate what would become the Freelancer's Union.

HOROWITZ: It had to join people together to solve problems, and it had to generate revenue so that it could pay for itself over time. And then, from there, started talking to workers and saying "what would it be?" And so the people's number one issue, back in the mid-90s was health insurance.

BRANCACCIO: With some grant money, Horowitz and a few dedicated volunteers began looking for ways to solve this...to make health insurance affordable for temps.

It wasn't easy.

HOROWITZ: I started by sitting down with regular brokers and just trying to understand what it is they do and the economic model. And started, really, thinking about insurance—in a more analytical level and how you could look at the regulatory system, look at the ways people are working and how you could start grouping them together. And then, again, through the power of a group, we're able to really communicate that freelancers are a large group.

And we're able to start getting them rates that are now 40 percent cheaper in New York. And actually, in New York freelancers have access to benefits that are better than very many large employers.

BRANCACCIO: The Freelancers' Union now offers members a menu of options beyond health coverage...dental, disability and life insurance, with different fees charged depending on what a member wants or needs. It's thirteen years since this social enterprise started and the freelancers union has figured out a way to pay for itself...last year—for the first time—it broke even.

HOROWITZ: At core, you have to be independent. And every union in America that has survived has that same kind of ability to have dues or some economic engine,

BRANCACCIO: We should point out that Sara Horowitz also sits on the board of the Nathan Cummings Foundation, which is one of the funders of NOW on PBS.

Horowitz's union is free to join. Members can network with each other, get discounts for the YMCA, or car-sharing services like zip-car. The union also offers a chance to come together to work on common problems.

On this afternoon, freelancers are meeting a state official with authority over employment, New York's Commissioner for Labor, Patricia Smith.

COMMISIONER SMITH: Being someone who's always had one regular full-time job, right—it's—it's a very different world. It appears to be a very different world out there. And often more fragile, a more fragile world.

MCKENNON: I had to go to alternative forms of health insurance which is a rigorous exercise program, and keeping myself in shape and making sure I never get sick.

ODUNSI: With my dental, I have to just -- I'm afraid to eat a cookie 'cause—(LAUGHTER) just like, "Okay, let me not get some sugar and corrode my teeth." So I'm just on this preventative insurance.

HSIUNG: I have had cases of not being paid for up to, you know six—six to eight months—after the—payment was due.

COLUCCI: I think the—the-employers know that especially if it's a -just a disputed amount in the—in the low hundreds or—or up to a thousand dollars or so, it's not worth anyone's time to pursue. And you're not going to be able to get an attorney to pursue it. It's not gonna be worth it financially. So, there are ways to, you know, get cheated out of small amounts of money on a frequent basis, unfortunately.

BRANCACCIO: Simply not getting paid is an all too common predicament.

So is the boss who decides a position is only for temps or independent contractors when, according to the rules, it should be a traditional staff job with benefits. New York's Labor Commissioner hates this misclassification because it's unfair to workers and unfair to those competing companies that do the right thing and hire properly.

SMITH: The Fiscal Policy Institute did a study last year of—and they estimated that 10 percent of the New York work force who are really employees are misclassified as freelancers.

And can you imagine what that does for your employers? Because if you're not an employee, you have to pay your—eight percent FICA yourself. You have to get your own disability benefits 'cause you're not entitled to worker's comp coverage 'cause you're not an employee.

You're not entitled to overtime. You're not entitled to unemployment insurance during periods when you don't have a job. So the employer saves all those benefit payments.

BRANCACCIO: Smith answers to New York's Governor Eliot Spitzer who has set up a new task force to get all the different government agencies with jurisdiction here—from labor to retirement to tax authorities—working together to make sure that independent contractors aren't getting illegally exploited.

In a new report, smith's group found that some initial sweeps of workplaces revealed numerous cases where quote: "unprincipled businesses have made a concerted effort to avoid their obligations."

SMITH: The task force, which is under the direction of the Commissioner of Labor, has been in existence for four months. And in that four month period we've found $29 million of unreported payroll.

That's $29 million in payments that should have been reported as employee wages that were reported on 1099s.

BRANCACCIO: In other words it's been paid out as essentially freelance income when it should have been—a payroll check?

SMITH: Exactly. Exactly. And of course with that $29 million would go all of the attendant tax—tax—taxes, unemployment insurance, the worker's comp payments, et cetera, et cetera.

BRANCACCIO: State officials are supportive of the work of the Freelancer's Union. But what about regular unions? Linda foley is president of the newspaper guild a traditional union of journalists that's now part of the powerful communications workers of america. She says the freelancers union does at least meet a need.

FOLEY: They are union in the sense—in the purest sense of the word. Which is that they are a group of workers who have joined together—who find themselves with a common set of circumstances—they don't necessarily do the same kind of work—but they find themselves with a common set of circumstances, and they haven't—they have an issue or issues that they feel need to be addressed.

The whole health insurance issue is—such a quagmire—and it is so—skewed and rigged by the insurance companies that it is very, very difficult to get your foot in the door—to—to actually—have a group of workers that can have access to insurance—health insurance—at a reasonable rate. So the fact that The Freelancers' Union has been able to do that is terrific.

BRANCACCIO: Foley cautions, however, that the Freelancer's Union doesn't have all same tools at its disposal that her union has to get good deals from employers.

FOLEY: The difficulty for The Freelancers' Union is that there is not the legal or—or political framework for them to be able to exercise as much power as we can exercise in a more traditional union sense at a collective bargaining table.

BRANCACCIO: When it comes to the members of The Freelancers' Union, how much they're getting paid—

FOLEY: Yes.

BRANCACCIO:—not a lot they can do.

FOLEY: No. Not—not the way—that—that the structures, the political structures and the legal structures that we have in place in this country—vis à vis—union management relationships—not the way those are structured now. No.

BRANCACCIO: While Foley believes her organization's work can live alongside the efforts of the freelancer's union, other traditional unions worry deeply about the trend toward freelance employment.

In a speech in March 2006, Edwin Hill, president of the International Brotherhood of Electrical Workers discussed how focus on profits has affected the broadcast industry, saying, quote: "this has resulted in the increasing use of freelance and other temporary workers at the expense of staff jobs with full benefits."

But in recognition of the growing role of independent contractors, Foley's newspaper guild has now opened its doors to some freelancers, (in some cases with health benefits.)

But it's the many workplaces outside the jurisdiction of a regular union where folks are especially attracted by Horowitz's quote-unquote 'union.'

BRANCACCIO: Is the Freelancer's Union really a union?

HOROWITZ: What is a union if it's not people coming together to solve their problems and to have influence in the Democracy? So I can't imagine how we're not a union.

BRANCACCIO: There's some things you can't do, though, that a traditional labor union can do. And I think of a basic one, which is sittin' the employer down and talking salary. Collective bargaining on things like that.

HOROWITZ: Right. Well, collective bargaining really has been—about 100 year old system of industrial Democracy. And an important one and one that's not going to go away. But when you have workers that go from place to place and job to job, collective bargaining just isn't a practical—thing to focus on initially. Really what we have to do is come together to purchase the things that people need and to come together for the advocacy to talk about the policy needs to make it so that people can do well.

BRANCACCIO: Let me ask you this, though. You must get—you must get accused by people in the traditional labor movement of being an enabler. The work of the Freelancer's Union makes it easier for employers to hire more fl—freelancers. And—and possibly eroding the ability to bring on people as full-time employees.

HOROWITZ: About five years ago the debate was about, "Is this good or bad?" And—we really took a very different tack that said, "There's good, there's bad but it's reality." And the number one rule of organizing is, you have to accept the reality as you find it and build from there.

We have over 16,000 people who get health insurance. We have 63,000 members that are in cities and states across the country that we're really building a movement. And that we're part of the social movement. That it's not just us, but a constellation of something much broader than us.

BRANCACCIO: There are signs of what may be a growing power among freelancers. Just two months ago, long-time freelancers at Viacom took to the streets of New York after the media giant tried to yank their benefits. A series of one-hour walkouts had an effect: many benefits were reinstated and some of the freelancers had their positions turned into real staff jobs.

No need for the freelancers union there...at least for now.

But there remains a pressing hunger for benefits and other protections for freelancers not just in New York. Although the freelancers union has members around the country, the vast majority of independent workers covered by its healthcare are in New York state).

Get the Freelancer's Union model to work in all 50 states and that could take a big bite out of the America's health care crisis.

Yet there are barriers. While the rules in New York state make it tougher for insurance companies to exclude older or sicker people, it's not necessarily that way elsewhere.

HOROWITZ: But I have to say that some of the laws in the other states, they enable insurance companies to cherry pick out the people who they want to cover. And they've made it virtually impossible to create groups.

They basically have enabled the insurance industry to ask people, what is your age? What is your medical history? What is your gender? Where do you live? All sorts of questions, so that they can target with precision—they're now cherry picking with precision in most states in America.

And that makes it virtually impossible to go in and say, we want young people. We want old people. We want healthy people. We want sick people. We're the freelancer's union. We only do well if our members stay with us for life.

BRANCACCIO: Part of that comes through trust...a trust built upon the understanding that the fees the freelancer's union charges are going toward the cause.

If we weren't here, our members would probably be getting health insurance from some brokers. And those brokers would probably have three McMansions. But instead, we are—put the money into advocacy and education.

BRANCACCIO: This may be the greatest achievement of the Freelancer's Union... the ability to knock heads, to lobby, and have a strong voice at the table...especially with the dawn of a new presidential administration.

HOROWITZ: But what's really important is that we think ahead. What is gonna be the next safety net going forward? Business is making it clear what it needs, and the changes that it needs to grow. Workers now have to start saying, "In this mobile world, what do we need? What's our safety net gonna look like?" And that's what our mission is, (VOICES) is to build the next safety net for this new workforce.

BRANCACCIO: As for Amy Peters, she's grateful for the work of the Freelancers Union but make no mistake, she sees an uphill battle here.

PETERS: If the Freelancer's Union is able to get enough people together then it does seem like it would be a great voice and a great lobby, but like all great grassroots uh...efforts it takes a really long time, it takes a lot of people and it takes a shift in culture.

BRANCACCIO: Yeah and in a market where it's tough to find work people are often willing to put up with all sorts of working relationships.

PETERS: Yes and all kinds of situations. They get asked things and they do it and it's crazy.

BRANCACCIO: And that's it for now. From New York, I'm David Brancaccio. We'll see you next week.